CBRE fund pays $228.4M to Wildflower, Amstar for two Amazon warehouses in East New York

CBRE Investment Management bought two adjacent Amazon warehouses in East New York from Wildflower Ltd. and Denver-based real estate investment group Amstar, public records show. Commercial Observer first reported the sale last week, providing a price of $230 million. Doug Middleton and Brian Fiumara represented the buyer and seller, according to the report.

The purchase includes industrial buildings at 12555 Flatlands Avenue and 12595 Flatlands Avenue in East New York, Brooklyn. Alternate addresses for the warehouses include 578 Cozine Avenue, 554 Cozine Avenue and the midblock development building at 771 Montauk Avenue.

The deal closed on April 1, 2022 and was recorded on April 26, 2022.

Adam I. Gordon and Matthew Karp were signatories for Wildflower Ltd. and Amstar Group, respectively. Head of Americas Direct Logistics Strategies and Portfolio Manager Mary Lang signed for CBRE Investment Management.

The sale was financed with a $45.1 million loan from JPMorgan Chase. This replaces a previous mortgage of $45.8 million from U.S. Bank. Zenaida Maniates signed for U.S. Bank on the mortgage assignment.

The three properties have 211,098 square feet of built space and 22,000 square feet of additional air rights for a total buildable of 216,000 square feet according to PincusCo analysis of city data.

The sale price per built square foot is $1,082 and the price per buildable square foot is $1,057 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 578 Cozine Avenue.

Prior sales and revenue

Out of the three properties, two with a total of 211,098 square feet of built space generated revenue of $6.3 million per year.

The property

The 578 Cozine Avenue parcel has frontage of 200 feet and is 485 feet deep with a total lot size of 97,000 square feet. The lot is irregular. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $11.1 million.
The 554 Cozine Avenue parcel has frontage of 200 feet and is 485 feet deep with a total lot size of 97,000 square feet. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $11.1 million.
The 771 Montauk Avenue parcel has frontage of 110 feet and is 200 feet deep with a total lot size of 22,000 square feet. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $602,000.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received four DOB violations and $3,000 in OATH penalties in the last year.

The neighborhood

In East New York, the bulk, or 31 percent of the 68.3 million square feet of commercial built space are 1-4 family buildings, with residential elevator buildings next occupying 26 percent of the space. In sales, East New York has the 4th highest sale turnover among other neighborhoods in the city with $2.1 billion in sales volume in the last two years. For development, East New York has 2.5 times the average amount of major developments relative to other neighborhoods and is the 8th highest in Brooklyn. It had 2.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

Surrounding

Within a 400-foot radius of 578 Cozine Avenue, PincusCo identified one commercial real estate item of interests occurred over the past 24 months.
It was a sale which Wildflower Ltd. bought the 0-square-foot development site (V1) on Milford Street for $5.6 million from John Polsinelli on October 20, 2020.

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